This bill requires the Office of Management and Budget to clarify how federal agencies should recognize special districts as eligible local governments for receiving federal grants and other financial assistance. Special districts are local government units created by states to handle specific functions like water management, fire protection, or transportation, and currently face inconsistent treatment across federal agencies when seeking federal funds. The OMB director must issue guidance within 180 days of the bill's enactment, and all federal agencies have one year after that to update their policies to comply with the new standards. Within two years, the OMB director must report to Congress on whether agencies have successfully implemented these changes. The bill does not specify new funding amounts but aims to improve access to existing federal financial assistance programs for special districts that meet the law's definition.